After being a modest performer until 2010, BNP Paribas Equity has climbed steadily in the Value Research rankings in the last five years. It is now a 5-star-rated fund, having enjoyed a 4- or 5-star rating since the end of 2012. It is a top quartile fund within the large- and mid-cap category, with 1-, 3- and 5-year returns that are well ahead of benchmark too.
Strategy: This fund has generally been overweight on large-cap stocks relative to the category. However, from an entirely large-cap portfolio until 2011, the fund has added on some mid and small caps in the last three years. In recent times, large caps have made up 70-76 per cent of the portfolio, mid caps 18-25 per cent and small caps 5-7 per cent. The fund's stock selection has a strong quality bias. Such quality stocks usually tend to come at a stiff price and therefore the fund employs a GARP (growth at a reasonable price) model to filter stocks. The fund does not take cash calls.
Performance: The fund isn't a chart topper within its category, where its peers have more aggressive mid- and small-cap allocations. However, its one-year returns of 44.9 per cent beat the benchmark and category by 23.5 per cent and 8.8 per cent, respectively. The 3- and 5-year returns at 25 per cent and 16 per cent are also well ahead of the category. The fund has seen two manager changes in the last eight years.
What we don't like: Though the fund has managed impressive performance in the recent bull run, it lacks a record during a bear phase.
Why invest: This is a large and mid-cap fund that doesn't take undue risks to deliver category-beating returns.
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8.IDFC Tax Advantage (ELSS) Fund
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10.BNP Paribas Long Term Equity Fund
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